EUR/USD 5M
The EUR/USD pair was trading quite actively on April 26. For the first trading day of the week with just one macro report, 60 points is not bad. It was moving in a calm manner during the day, without sharp and frequent reversals, which are usually impossible to work out normally. So in principle, traders should have been able to make money, according to yesterday's recommendations. The quotes of the euro/dollar pair did not stand in one place during the Asian session, but instead they were growing. This growth did not last long though. The pair was just above the extremum level of 1.2108 at the beginning of the European session, so settling below it would be the first signal to sell. After forming this signal, the price did not go down 15 points and returned to the 1.2108 level. Thus, Stop Loss should not have been set at breakeven. There was another rebound from the 1.2108 level, so it was still necessary to stay with shorts. The bears' second attempt was crowned with success, and the price dropped to the nearest level, also the extreme at 1.2076, allowing one to earn around 26 points. It did not rebound from this level, but there was a breakthrough, according to which it was possible to open new short positions, however, about an hour before that, a rather important report on orders for durable goods was published in America (number "1"), and, in theory, it was better to close all open positions shortly before it was released and one should not open new ones in the near future after it. In any case, a short position would have closed at a profit of about 26 points, but it would have been possible to save oneself from losses on a signal to surpass 1.2076. A little later, the quotes finally settled above the 1.2076 level, and since two hours have passed since the report was published, one could open long positions using this signal.
EUR/USD 1H
The picture is clearly corrective on the hourly timeframe. After rebounding from the 1.2113 level, the pair began a downward correction within the upward trend, which continues to be supported by two upward trend lines at once. So far we are talking about a pullback. The price can bounce and resume the upward trend from the critical Kijun-sen line. At the expense of the reasons, we have repeatedly mentioned in our fundamental articles that you should familiarize yourself with them. We still recommend trading from important levels and lines that are indicated on the hourly timeframe. The nearest important levels are 1.2076, 1.2113 and 1.2145, as well as the Kijun-sen line (1.2055). Signals can be rebounds or breakthroughs of these levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price moves 15-20 points in the right direction. This will protect you against possible losses if the signal turns out to be false. No important events in the European Union that deserve your attention for now, but, a more or less interesting indicator of consumer confidence for April will be released in the US today. However, even judging by yesterday's report on orders for durable goods, we are talking about the reaction of the market in the best case, points 20-30.
We also recommend that you familiarize yourself with the forecast and trading signals for the GBP/USD pair.
COT report
Recall that the EUR/USD pair increased by 120 points during the last reporting week (April 13-19). Notably, major players have actively been reducing buy contracts (longs) and opened sell contracts (shorts) instead. In the "non-commercial" group, the total number of Buy-positions has decreased from 240,000 to 190,000 and the number of Sell-positions has grown from 76,000 to 127,000 since the beginning of February. Therefore, it is evident that the bullish sentiment has been waning down, however, the sentiment is still bullish, and in the last two weeks it has begun to strengthen again. Recall that the Commitment of Traders (COT) reports has signalled the end of the upward trend since last September, when the lines of the first indicator moved as far apart as possible. However, we still remind you of the fact that money is still being injected into the US economy. Simply put, big players can trade as they please, in any direction, buy any currency, but if at the same time the money supply of dollars increases by trillions, the influence of the players themselves on the foreign exchange market becomes less. Accordingly, now the factor of an increasing money supply in the United States is in first place, not the behavior of non-commercial and commercial traders in the foreign exchange market. Professional traders opened 6,200 buy contracts (longs) and closed 8,500 sell contracts (shorts) during the last reporting week. Thus, their net position increased by 14,700 contracts. And so it is possible that the major players realized that the euro would still rise, and the dollar would fall, and so they decided to trade with the trend themselves. If earlier it was the big players who formed the trend, now they follow the trend. In general, from our perspective, there is a very high likelihood that the euro will keep growing in 2021.
Explanations for the chart:
Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.
Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one.
Support and resistance areas are areas from which the price has repeatedly rebounded off.
Yellow lines are trend lines, trend channels and any other technical patterns.
Indicator 1 on the COT charts is the size of the net position of each category of traders.
Indicator 2 on the COT charts is the size of the net position for the non-commercial group.
